Wednesday, June 6, 2012

Ex-Real Estate Agent Bagged In Alleged $200K+ Ripoff Of Clients' Downpayment Deposits Never Placed In Escrow; DA: Suspect "A Common & Notorious Thief"

In Peabody, Massachusetts, The Salem News reports:

  • A former real estate broker from Peabody pleaded not guilty yesterday to charges that she stole more than $200,000 from a dozen clients hoping to purchase homes through "short sales," prosecutors announced.

  • Farkhanda "Kandy" Tarar Shah, 61, was indicted by a Middlesex County grand jury on charges of felony larceny, embezzlement, and being a common and notorious thief, the Middlesex district attorney said in a press release.
  • [District Attorney Gerry] Leone said Shah was both a licensed mortgage broker and real estate agent who ran a business called K-Realty in Somerville. Over a two-year period between 2007 and 2009, Shah repeatedly used deposits left by clients for her own business and personal expenses, Leone said. Such deposits are legally supposed to be kept in an escrow account.

  • Shah's clients hired her to help them purchase properties that were "underwater" and facing foreclosure through so-called short sales. Because such transactions can be fraught with delays or other obstacles and require approval of the mortgage holder, many of the deals fell through.

  • However, when clients wanted to get their deposit money back from Shah, they learned that she was unable to pay them — because, prosecutors say, she had already spent their money rather than putting it into escrow accounts.

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